WRIGLEY INDIA PRIVATE LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE appellants had imported secondhand machinery with spare parts from a related supplier viz. M/s. Wrigley C.O.S.A., Spain and had filed a Bill of Entry on 28.4.2006 declaring the value of the machinery as EURO 35876.49 (FOB) on the basis of the invoice raised by the supplier. The machinery was classified under Heading 8422 44 00 of the CTA and CETA Schedules. In respect of one of the machines, the benefit of concessional rate of basic customs duty was claimed under Notification No. 21/2002 -Cus. (Sl. No. 537). As both the machines were used/secondhand, the importer was asked to submit the load port Chartered Engineer's certificate but the same was not produced. In the circumstances, the goods were got examined by the local Chartered Engineers M/s. S.G.S. India (P) Ltd., who, in their report dated 2.6.2006, confirmed the declared description of the goods but reported EURO 3,19,528.80 (FOB) as the 'correct value' of the goods. This value was certified by the local Chartered Engineers on the basis of the inspection report of their Spanish counterparts dated 15.2.2006. The Customs authorities found that the importer had deliberately withheld the load port Chartered Engineer's certificate with intent to suppress the correct assessable value of the goods for evading payment of Customs duty. On this basis, the Commissioner confiscated the goods under Section 111(m) of the Customs Act and imposed on the importer a penalty of Rs. 5 lakhs under Section 112(a) of the Act. The importer was, however, allowed to redeem the goods on payment of a fine of Rs. 15 lakhs under Section 125 of the Act. Of course, the declared value of the importer was rejected and the goods were valued at EURO 3,19,528.80 (FOB) for the purpose of payment of duty.

(2.) IN the present appeal, the importer submits that there was no misdeclaration of value in the Bill of Entry inasmuch as, though the load port Chartered Engineer's certificate was not produced, the supplier's invoice indicated the secondhand machinery having been certified by the Spanish Chartered Engineers. In this context, it is also submitted that there is no mandatory requirement of filing the load port Chartered Engineer's certificate. In this connection, reference has been made to CBEC's . dated 12.2.2008 relating to valuation of secondhand machinery. Reiterating these grounds of the appeal, the learned Counsel argues that the order of confiscation is not sustainable and consequently the fine and penalty have to be set aside. Without prejudice to this case of the appellants, the learned Counsel also submits that the goods in question are no longer fit for the intended purpose and therefore the same maybe permitted to be re -exported.

(3.) WE have given careful consideration to the submissions. The appellants have challenged the finding of misdeclaration of value, by submitting that the supplier's invoice itself indicated the secondhand machinery having been certified by the load port Chartered Engineers viz. S.G.S., Spain. The appellants have not contested the Commissioner's finding that the local Chartered Engineers viz. M/s. S.G.S. India (P) Ltd. certified the value of the machines at EURO 3,19,528.80 (FOB) on the basis of the load port Chartered Engineer's certificate i.e., the certificate of M/s. S.G.S Spain. According to the appellants, it was this very certificate of M/s. S.G.S., Spain that was referred to in the supplier's invoice. The appellants have no case that, at the time of import, they were not aware of what was certified by M/s. S.G.S., Spain. On these facts and circumstances, it is to be held that the higher value of EURO 3,19,528.80 (FOB) was known to the appellants at the time when they filed the Bill of Entry declaring the value of EURO 35,876.49 (FOB) for the secondhand machines. Thus misdeclaration is evident in this case. Obviously, this is the reason why the appellant s agreed to enhancement of value before the adjudicating authority. The goods, the value of which was misdeclared by the importer, attracted Section 111(m) of the Act and therefore the challenge against the confiscation of such goods is not tenable. The learned Counsel has relied on the Board's . dated 12.2.2008. In relation to valuation of secondhand machinery, this Circular suggests that a local Chartered Engineer's certificate may be accepted in the absence of proper load port certificate. Firstly, this guideline issued by the CBEC on 12.2.2008 has no retrospective effect. Secondly, it is relevant only in the absence of load port certificate. In the instant case, there was a load port certificate on the date of import, but the same was not produced by the importer. Thus the Board's Circular would in no way support the appellant's case. On the other hand, Final Order Nos. 604 - 607/2008 dated 24.6.2008 of this Bench, cited by the learned SDR, squarely supports the Commissioner's decision to confiscate the goods under Section 111(m) on the ground of misdeclaration of value.